Briefly: iPad refunds; HonHai raising wages; Nokia Lumia estimates

Apple has begun emailing customers in Australia with an offer to return LTE-capable third-generation iPads by April 25 if they expected the tablet to work on local 4G networks. Also, Apple partner Foxconn's parent company Hon Hai has announced plans to raise wages at its headquarters in Taiwan, and analysts are concerned that Nokia's Lumia 900 Windows Phone launch in the U.S. will flop.

iPad in Australia

Apple told Australian regulators last week that it would provide refunds to customers in response to allegations of false advertising regarding its LTE iPad. The new iPad is incompatible with the LTE networks in Australia, but Apple has been accused of not clearly warning local buyers about that fact.

The Cupertino, Calif., company began sending emails on Wednesday, according to MacRumors. The email reportedly says that the new iPad Wi-Fi + 4G model supports "very fast cellular networks," while notifying customers that Australian LTE and WiMAX networks are not supported.

Customers who purchased the new iPad on or before March 28 will be eligible to return undamaged iPads for a full refund before April 25.

Apple launched the new iPad in Australia and nine other countries on March 16. A lawyer for the Australian Competition and Consumer Commission said the regulator had contacted Apple on March 15 to voice concerns about its marketing materials.

Hon Hai raises

Hon Hai said Thursday that its employees in Taiwan will benefit from a "significant" wage increase as part of an effort to court and keep employees, as reported by The Wall Street Journal.

The company employs 10,000 people at its headquarters, mostly in R&amp;D, marketing and business planning, the report noted. The increase will go into effect in July, though the company has yet to decide on the exact amounts of the raises.

The company's mainland subsidiary, Foxconn, is one of Apple's chief partners in manufacturing its products. Foxconn raised workers' wages by as much as 25 percent in February, presumably to address widespread criticism over its pay structure.\t The manufacturer has also agreed to address numerous violations detected during a third-party audit commissioned by Apple and conducted by the Fair Labor Association.

However, some Foxconn employees are worried that they will be unable to make ends meet after their overtime hours are reduced to the legal maximum. Chinese law sets a maximum of 36 hours a month of overtime.

Both Foxconn and Apple have been the subject of numerous news reports this year as outlets have brought to light allegations of poor working conditions at factories in China.

Nokia launch

Bloomberg reports that several investment banks expect Finnish handset maker Nokia to feel just hundreds of thousands of its Windows Phone-based Lumia 900 smartphone in its first quarter of availability in the U.S.

The Lumia 900 goes on sale in the U.S. on Sunday. Early reviews have praised the device for its attractive design, while criticizing the software as not being "competitive" with iOS and Android.

Deutsche Bank analyst Kai Korschelt believes muted consumer demand will result in sales of just 680,000 Lumias on AT&amp;T. A worst case scenario of paltry consumer interest and a lack of support from AT&amp;T could result in sales of 140,000 a quarter, according to the analyst. Avian Securities analyst Matthew Thornton projects sales of 370,000 Lumia 900 devices.

By way of comparison, AT&amp;T activated 9.4 million smartphones in the fourth quarter of 2011. The launch of the iPhone 4S brought record sales for the carrier, with iPhones accounting for more than 80 percent of its smartphones sales during the period.

“It’s going to be an uphill fight,” said Thornton. “The Nokia brand, while I think it’s still known here [in the U.S.], lags Apple and even Samsung. I don’t see the phone becoming a hit.”

The analyst went on to suggest that Nokia and Microsoft are not likely to make a huge profit on the device because of the device's $99 price tag and the cost of the marketing campaign. He believes the two companies are more worried about proving to the carriers that Windows Phone is worth the trouble.

“If it flops, AT&amp;T is going to have very little incentive to push this again when they come out with the next product,” Thornton said.

For its part, AT&amp;T has said it's not concerned with just launch sales. “How many we sell on the first weekend may not be the most important metric for us,” Jeff Bradley, AT&amp;T senior vice president of devices, told the publication. “We want to see slow, steady growth.”

Recon Analytics analyst Roger Entner said the timing of the Lumia 900 launch is "good" because it won't have to compete with other high-profile handset launches. "The iPhone 5 is still months away," he said.

Nokia dominated the smartphone landscape for years, but relative newcomer Apple has overtaken the company to become the No. 1 smartphone vendor in the world. In 2011, Nokia managed to hold onto its title as the world's largest mobile phone vendor with 23.8 percent market share, according to research group Gartner, but rival Samsung is hot on its heels with 17.7 percent share.

As its mobile market share has eroded, Nokia has seen its earnings collapse. The company saw a 73 percent drop in earnings during the fourth quarter of 2011. The report noted that Nokia has lost $80 billion in market value since Apple launched the iPhone in 2007.

For its part, AT&T has said it's not concerned with just launch sales. “How many we sell on the first weekend may not be the most important metric for us,” Jeff Bradley, AT&T senior vice president of devices, told the publication. “We want to see slow, steady growth.”

There are reasons why a wireless carrier would want slow, steady growth. There's no point in them selling 10 million LTE phones if they've only got capacity for 2 million. AT&T needs LTE phone sales to grow at the same rate as their capacity.

We saw with the iPhone that a sudden flood of new devices can have a strong detrimental effect on a network's performance. The unusual way that the iPhone handled data connections caused O2 UK (the exclusive carrier at the time) big headaches and tarnished the network's reputation.

I switched all of my browsers to the Bing search engine in protest of Google's disregard of IP. It turns out, as fresh and new as the Metro UI looks, I hate, hate, hate using it (Microsoft is now approximating it on Mobile Bing).

I had been eyeing Windows phones as a possible alternative if the iPhone screen sizes continues to be limited to 3.5", but now I don't think I could live with it. Good luck, Nokia!

If anything Apple releases doesn't have 'fast' meteoric growth it is slammed as a failure. That has become the norm now and the rest of the industry is measured by the same metric these days. I guess you have to read the 'slow steady' in that context.

From Apple ][ - to new Mac Pro I've owned them all.Long on AAPL so biased"Google doesn't sell you anything, Google just sells you!"

Bloomberg reports that several investment banks expect Finnish handset maker Nokia to feel just hundreds of thousands of its Windows Phone-based Lumia 900 smartphone in its first quarter of availability in the U.S.

The Lumia 900 goes on sale in the U.S. on Sunday. Early reviews have praised the device for its attractive design, while criticizing the software as not being "competitive" with iOS and Android.

Feel just hundreds of thousands? AI, proof-read before posting. Also, the reviews I read such as those from Mossberg and Topolsky were down on the phone because of problems with the device such as poor quality pics, UI, and WiFi . MIght want to be more specific than simply saying not 'competitive'.

The one and only reason Nokia's marketshare is what it is is because the majority of its sales are currently in cheap feature phones that make very little profit. They area sinking ship that has now been torpedoed by MSFT. Bon voyage!

Bloomberg reports that several investment banks expect Finnish handset maker Nokia to feel just hundreds of thousands of its Windows Phone-based Lumia 900 smartphone in its first quarter of availability in the U.S.

Quote: "The analyst went on to suggest that Nokia and Microsoft are not likely to make a huge profit on the device because of the device's $99 price tag and the cost of the marketing campaign."

Who in their right mind actually thing a smartphone costs 99 dollars? News flash, phones, smart phones in particular cost more than 99 dollars. This is the problem with the US cellular market. Misleading advertising and gullible people who believe the crap fed to them.

Because we have already seen this...there are tons of other Microsoft Windows Phone clones already available in the US. The only difference with this clone is it has a Nokia label on it. It will not sell for the same reasons the other Windows Phone clones have not sold....the OS is terrible.

If there was a "buyer beware" that was unheeded then how is that Apple's fault?

Amazing how dumb people can be and refuse to own up to it.

It's not Apple's fault. It's just that sometimes it's easier to go along than to fight against the mindless bloggers and 'journalists'. After all, it won't cost Apple much. I doubt very much that they're going to see very many iPads returned.

"I'm way over my head when it comes to technical issues like this"Gatorguy 5/31/13

Quote: "The analyst went on to suggest that Nokia and Microsoft are not likely to make a huge profit on the device because of the device's $99 price tag and the cost of the marketing campaign."

Who in their right mind actually thing a smartphone costs 99 dollars? News flash, phones, smart phones in particular cost more than 99 dollars. This is the problem with the US cellular market. Misleading advertising and gullible people who believe the crap fed to them.

That struck me as well. Nokia does not sell the phone for $99. They sell it for a much higher price to the carriers, who then sell it for a much higher price to the consumer by getting a $99 down payment and financing the rest via the monthly service fee.

Quote: "The analyst went on to suggest that Nokia and Microsoft are not likely to make a huge profit on the device because of the device's $99 price tag and the cost of the marketing campaign."

Who in their right mind actually thing a smartphone costs 99 dollars? News flash, phones, smart phones in particular cost more than 99 dollars. This is the problem with the US cellular market. Misleading advertising and gullible people who believe the crap fed to them.

Who in their right minds wouldn't have considered that with an unlocked price of $449, suggesting at best a $350 carrier subsidy (and it wouldn't surprise me if it isn't $250-300 with an extra $50-100 spiff from MS) then at the low volumes this is going to sell in, there is not much actual profit after marketing and fixed costs... iPhone costs $190-215 in parts at 10x Nokia volumes and makes about 65% gross margin before the fixed costs are allocated. It's ASP is $200 more but it's BOM is probably only 25% more.

Nokia are probably making 2/3 to a half of Apple's GM and the spending a fair chunk on marketing and carrier incentives - free phones, advertising, etc. The reported $100-200M spend in the US to launch this could work out to $100-200 per phone if they "only" sell a million or 2.

No-one is saying Nokia are definitely making a loss on this, but it won't be some magical money spinner. My guess is that MS is footing the bill for a lot of the push including making it relatively "value priced" compared to high-end Androids and iPhone.

I switched all of my browsers to the Bing search engine in protest of Google's disregard of IP. It turns out, as fresh and new as the Metro UI looks, I hate, hate, hate using it (Microsoft is now approximating it on Mobile Bing).

I had been eyeing Windows phones as a possible alternative if the iPhone screen sizes continues to be limited to 3.5", but now I don't think I could live with it. Good luck, Nokia!

On the other side of your thoughts, I could never live with a cell phone bigger than the iPhone or its copycats. To me, the iPhone (3 in my family) is already to big as a phone (primarily). I'm tired of walking around with the bulge in my pocket looking like a boner. My feature flip phone handles my calls and text fine and it is half the size of my iPhone. Now that I have the new iPad to handle mobile apps, I can go back to using my feature phone again for just phone use.

I love the iPhone's functionality but it made cell phones grow larger than I'd like. I know that it's more than a phone with function that allows me to use my computer less. However, phones this size are not IMO conducive active outdoor activities. That's probably why Apple pushed the Nano with the Nike+ so hard until people got used to and accepted the iPhone's size.

No-one is saying Nokia are definitely making a loss on this, but it won't be some magical money spinner. My guess is that MS is footing the bill for a lot of the push including making it relatively "value priced" compared to high-end Androids and iPhone.

The minimum specs that MS demands for the phone to handle the OS puts the Nokia more expensive to make than an iPhone. They start out at a disadvantage even when the lower productions levels add to the cost.

I expect to hear a lot of positive BS about the phone in the same way we heard all kinds of crap about the "great and fantastic" Zune. I suspect this is going to crash and burn but the news of such will be be clouded in Ballmer-speak.

"That (the) world is moving so quickly that iOS is already amongst the older mobile operating systems in active development today." — The Verge